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BP Offering Cash to Protesting Station Owners

Retailers will receive checks based on volume, location.

June 28, 2010, 08:00 pm

HOUSTON -- BP will send checks to operators and suppliers of BP-branded gasoline stations to offset some of the losses caused by boycotts prompted by the Gulf oil spill.

The head of a trade group that represents U.S. distributors of BP gasoline told The Associated Press the oil company is offering cash, reductions in credit card fees and more national advertising. The cash component will be based on distributors' volume and will be higher for stations in Gulf Coast markets, according to John Kleine of the BP Amoco Marketers Association.

"They are going to get a check," Kleine told the news organization. "They're being given these dollars for use in their business." Kleine estimated the value of the total package at $50 million to $70 million.

Distributors would still be free to sue BP and seek compensation from the $20 billion compensation fund if they choose, Kleine added.

Some BP-branded gas stations have reported sales declines of 10 percent to 40 percent since the April 20 rig explosion in the Gulf of Mexico, the AP reported. The major oil company owns a small percentage of the 11,000-plus U.S. stations that sell fuel under its BP, Amoco and ARCO banners.

Kleine said the 475 BP distributors in the country, many of whom own or operate BP-branded gas stations, were being notified directly by the company. Calls began Monday and would likely continue through Wednesday, he said.

The cash will be used by the distributors how they see fit, according to Kleine, who said the money could result in discounts to consumers at BP-branded pumps. Some distributors may use the money to bolster their bottom lines, which have been affected because of the boycotts."There's a lot of variance in terms of the business effect of this incident," Kleine told the AP. "To try to manage this nationally, it's just too big of an elephant. They recognized that the people that have the best knowledge and can apply the resources best are the local distributors."